DaytonDailyNews.com

In 2001, employees of Appleton Papers Inc. stood at a crossroads.

Carbonless paper, which Appleton's West Carrollton plant made, was declining, and Appleton's Paris-based parent, Arjo Wiggins Appleton, had twice tried to sell the company, but was unsuccessful.

Corporate officers offered an idea: Why not have employees buy Appleton with part of their retirement savings?

The notion was not risk-free. The paper and packaging industry is competitive, particularly for American manufacturers. Formation of an Employee Stock Ownership Plan — or ESOP — offered no guarantees.

There was no "safety net," said Bill Van Den Brandt, Appleton spokesman.

"You come to the realization that in fact you do own the company," he said.

Doug Buth, Appleton's chief executive at the time, persuaded the parent company that the idea could work.

Employees agreed. About 90 percent of Appleton employees voted to contribute an average of nearly 75 percent of their retirement savings to buy company stock, Van Den Brandt said.

In November 2001, the company announced it had used a $107 million employee investment to complete an $810 million buyout of the company.

At the time, company shares were valued at $10. As of Dec. 31, 2006, shares were put at $33.62. (The private company's shares are valued twice a year. The next valuation is June 30.)

Today, the new Appleton is the nation's 35th largest employee-owned company, according to a ranking by the National Center for Employee Ownership.

Scott Rodrick, director of publishing for the National Center for Employee Ownership — the Oakland, Calif.-based publisher of The Journal of Employee Ownership Law and Finance — said worker ownership can have a positive impact on morale, especially when ownership blends with a corporate "high-involvement culture" that's already in place.

"With no change in the company culture, there's no particular reason why everyone is going to run around like a madman and start working twice as hard," Rodrick said.

Contact this reporter at (937) 225-2390 or tgnau@DaytonDailyNews.com.

Appleton plants

West Carrollton: A paper mill with recycling operations. The mill makes carbonless paper and uncoated base paper. In January, the company announced plans for a $100 million expansion scheduled to be complete in mid-2008, adding some 35 new jobs.

Roaring Spring, Pa.: This plant makes carbonless and security papers.

Appleton, Wisc.: A converting plant.

Portage, Wisc.: A capsule plant.

Other facilities are part of a packaging division, specialized print services and distribution centers operated in Appleton, Harrisburg, Pa., Florence, Ky., Kansas City, Portland, Los Angeles, Atlanta, and in Ontario, England and the Netherlands.

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